Indices give up early gains and close flat

16 February 2006

Markets opened with sharp gains today and the Sensex posted a new lifetime intra-day high of 10195 in opening trades. However, within minutes of opening both Sensex and Nifty gave up most of their gains.

Markets recovered by mid-morning and by early afternoon both indices were back to their early highs. Afternoon saw more profit booking which saw the indices closing near the lows of the day.

Dr Reddy's was the star of the day after the company announced an . After opening firm, the stock gained strength throughout the session before closing more than 9 per cent higher.

SAIL made a big come back today and closed nearly 5 per cent higher. There are unconfirmed reports that a Chinese trade body is trying to limit steel production in that country. Tata Steel also closed higher by more than a per cent.

Auto stocks rallied today, led by Tata Motors which added nearly 4 per cent. M&M gained over 3.5 per cent while Hero Honda added over 3 per cent. Maruti also closed higher.

Jet Airways gained 3 per cent on unconfirmed reports that the company has almost finalised its fund raising programme to finance the Air Sahara buy out. The company is reportedly planning to raise $800 million to finance the acquisition and fleet expansion.

Grasim, Tata Power and HDFC Bank were the other major gainers.

Tata Tea was the biggest loser among index stocks after the stock hit the exposure limits in the F&O segment. The stock finally closed with losses of more than 5.5 per cent.

Aluminium stocks declined again after yesterday's recovery. Nalco gave up more than 3.5 per cent while Hindalco slipped nearly 2 per cent.

Ranbaxy slipped more than 3.5 per cent as traders dumped the stock after the company lost out in the race to acquire .

ITC declined after yesterday's rally in the wake of excellent results from the other FMCG major HLL. The stock closed more than 2.5 per cent lower.

MTNL, Glaxo, Bajaj Auto, Gail and L&T were the other losers.
Sensex closed at 10124, a gain of 11 points, and the Nifty closed flat at 3022. Nifty February futures closed at a discount of 7 points to the spot index.

Asian markets were firm today, helped by the up trend in US markets yesterday and the sharp fall in oil prices. Shanghai was the only major index to lose ground, closing more than 2 per cent lower.

US markets maintained their uptrend yesterday as well. The US Fed chairman's statements on interest rates and inflation outlook were in line with market expectations. The sharp fall in oil prices also helped the sentiment.

The Dow closed with gains of 0.28 per cent while the S&P 500 added 0.35 per cent. NASDAQ did even better and closed 0.63 per cent higher.

Crude prices saw one of the worst daily declines this year as they lost over 3 per cent yesterday. US oil stocks were higher as per the weekly inventory data released yesterday. Funds and large traders exited their positions after the release of the stock data. March NYMEX futures closed at $57.65 per barrel yesterday. The commodity is trading nearly $1 per barrel higher in early European trades today.

Dr. Reddy's has signed a definitive agreement to acquire a 100 per cent stake in German generic company Betapharm. Dr. Reddy's would pay €480 million for the all cash deal.

Dr. Reddy's said Betapharm is the fourth largest generic drug firm in Germany and the fastest growing in that market. The acquisition would add around $200 million to the top line of Dr. Reddy's.

, a subsidiary of Reliance Industries, has raised $1.5 billion in syndicated loans to part-finance its proposed export-oriented refinery in Jamnagar, Gujarat. The project is expected to cost $6 billion and the company may also come out with an IPO later this year.

and has raised $400 million. The company may also retain an additional $40 million from oversubscriptions. The 5-year zero-interest bonds are convertible at a premium of 60 per cent to the current market price of Ranbaxy.

Tata Motors has priced its Japanese Yen denominated convertible bonds at Rs1,001.39 per share. The 5-year bonds carry no interest and would be listed on the Singapore exchange. The company raised around $100 million from the issue.

The government has approved the merger of Indian Iron and Steel Company (IISCO) with SAIL.

Bank of Baroda has signed an agreement with IDFC to provide debt financing and other services to infrastructure companies.

Mid-Cap Action

Mid-caps managed to partly survive the afternoon decline in large cap stocks. Select sectors and stocks continued to see heavy buying today as well. The CNX Mid-Cap index gained 10 points to end the day at 4437.

Orchid Chemicals has won a 7-year contract from Pfizer for research and development of animal health products. Financial details of the deal have not been disclosed.

Construction company Gammon India has received orders from the National Highway Authority and National Hydro Electric Power Corp. The orders are worth a total of more than Rs1,000 crore.